## 1.   Delivers a successful program to the Minister.

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**Canonical URL:** [1.   Delivers a successful program to the Minister.](https://www.imf.org/-/media/files/publications/tnm/2017/tnm1703.pdf)

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---

### Governance and Key Roles
- Sponsor (Minister-level responsibilities implied by heading):
  - Delivers a successful program to the Minister.
  - Ensures the governance structure is appropriately staffed.
  - Chairs the business of the reform steering committee.
  - Solicits and obtains funding for the program.
- Independent assuror:
  - Highly experienced professional engaged by the sponsor to provide direct advice on any program feature, particularly:
    - Vendor performance.
    - General progress at either program or project level.
    - Specific guidance on issues resolution.
- Steering committee (project sponsor, project owners, director/head of reform program office, external representatives):
  - Provides strategic direction to all project teams.
  - Ensures from the start that a project’s scope aligns with the program plan and requirements of the target stakeholder groups.
  - Assesses project feasibility in terms of resource commitments vis-à-vis the benefits or outcomes.
  - Allocates resources to projects and provides timely and objective decisions on prioritization of initiatives.
  - Monitors project scope and keep it under control as seemingly small emergent issues can force a departure from plan.
  - Deals with issues and risks that have implications for the projects.
  - Makes binding decisions on cross-cutting issues across projects in order to balance conflicting priorities against available resources.
  - Checks adherence of project activities to standards of best practice, both within the organization and in a wider context.
  - Takes necessary steps to secure policy decisions or legislative amendments needed to achieve program objectives.
- Central program management office (full time, director/head of reform program, project counterparts):
  - Kick-starts the implementation of approved projects.
  - Guides the preparation of the project plans.
  - Manages vendor contract(s).
  - Consolidates periodic project status reports for presentation to steering committee.
  - Provides secretarial services to the steering committees.
  - Monitors all aspects of the project components.
  - Oversees day-to-day project implementation and provides advice and technical project management support to the project teams.
  - Disseminates and applies good practices for effective project management.
  - Ensures corrective measures are taken whenever institutional plans are modified and when project milestones and deliverables are behind schedule or not meeting set standards.
  - Ensures that the set standards for project monitoring and evaluation are met, including arranging for quality assurance services based on need.
  - Coordinates the resolution of complex cross-cutting issues among projects.
- Project sponsor (often the head of the business area/sector):
  - Delivers a successful project to the Director General/CEO.
  - Prepares the project owner’s brief to the steering committee.
  - Provides the project’s strategic direction and overview.
  - Appoints an appropriate project manager.
  - Presents the project business case/justification to the steering committee.
  - Approves the project plan and any material change requests.
  - Monitors progress against the project’s objectives.
  - Ensures risk is effectively identified and managed.
  - Signs off completed project.
- Project manager (full time, appointed by the project owner):
  - Delivers a quality project on time and within budget to the project sponsor.
  - Establishes the project in the project administration system through a formal registration action.
  - Prepares a project justification or business case to be considered by the steering committee before approval.
  - Prepares, implements and updates the project plan.
  - Manages the project according to the project plan, including:
    - Leads the team proactively, providing guidance necessary to ensure the project meets the agreed objectives.
    - Encourages team members to take ownership and accountability for their identified responsibilities.
    - Promotes a team approach and provide timely feedback to team members.
    - Seeks (constructive) feedback throughout the project.
  - Communication—the project manager must:
    - Promote the project and its benefits at every opportunity.
    - Identify any resistance to proposed changes and sensitize affected staff and stakeholders in a timely manner.
    - Build and maintain key stakeholder relationships.
    - Share experiences with other Project Managers.
    - Communicate change management initiatives at every stage.
  - Vendor/supplier management—the project manager must:
    - Ensure vendor progress complies with the contractual obligations.
    - Assign a suitable contract manager to work with the vendor.
    - Ensure vendors comply with their quality plans.
    - Adequately check all key deliverables before acceptance.
    - Meet the vendor expectations in regard to timelines, counterpart support, and quality of revenue agency inputs.
- Project team (full time, appointed by project sponsor in consultation with project manager):
  - Work with the project manager and vendors to develop the detailed project plan.
  - Prepare the project work plan allocating time and resources to tasks.
  - Carry out the day-to-day project activities specified in the work plan.
  - Plan for implementation of project initiatives, including decisions on pilots, development of specification documents, etc.
  - Monitor and evaluate implementation of activities in the project plan.
  - Prepare/update and submit progress reports including issues and risk assessments to project manager.
  - Develop messages to be communicated to different categories of stakeholders.
- Business owner(s):
  - Responsible for managing the project outputs after the closure of the project and accountable to the project sponsor for the realization of the project outcomes/benefits in the post-project environment.
  - Continuously involved from the early conceptual stages of the project through to the testing and acceptance of the completed outputs.
  - Provide assurance that the project will deliver all of the outputs necessary to realize the expected outcomes/benefits.
  - Contribute subject-matter expert resources to the project in order to ensure that the outputs are developed satisfactorily.
  - Ensure that the project outputs (i.e., products and services) are “fit-for-purpose.”
  - Ensure that appropriate change management planning is in place to integrate the project outputs into the regular business operations when the project closes.
- Reference groups:
  - Convened as needed to address particular facets of the project; made up of a small representative group of clients/users from areas that will be affected by the project’s work.
  - Participants selected on the basis of experience and/or special expertise; convened to focus collective technical expertise and business experience to reach consensus solutions to operational issues.
  - Promote “ownership” of the project outcomes more broadly across the organization and within the community.
  - Help disseminate information about the scope and outcomes/benefits of the project throughout their business areas and peer groups.
- Consultants and contractors:
  - May be engaged to provide specialist expertise or services not available from internal resources. Typical examples include:
    - Business analysts;
    - IT specialists;
    - Legal advisors;
    - Probity advisors;
    - Training experts;
    - Communication experts; and
    - Quality assurors.

### Vendor Roles and Relationships
- Purchasing a COTS product creates a long-term arrangement with the vendor; care must be taken to manage the arrangement and resolve issues quickly and effectively.
- Vendor-supplied experts are essential to a successful outcome; project teams gain most if they act cooperatively and assimilate vendor representatives into the team.
- Vendor engagement types:
  - Long-term support plus installation/configuration: vendors may take leadership roles and provide staff for the majority of project roles, becoming integrated into the administration.
  - Shorter defined term (install/configure only): vendor acts in a consultant-type role—explaining and teaching administration staff to manage the product.
- Important to note vendor’s experience in previous installations/configurations as they can often explain how particular issues have been handled successfully elsewhere.

### Business Process Considerations
- Introduction of a new system provides options for business process re-engineering (BPR); COTS products can accommodate many different processes.
- Recommended engagement of BPR specialists and design disciplines such as Lean Six Sigma, Rapid Application Design, Agile methodologies to facilitate reference groups.
- User expectations must be carefully managed; COTS products often have some level of business process built in and represent outcomes of vendor research on general needs of tax administrations.
- Business owners and IT officials must be central to assessment, design and implementation activities.
- Avoid discarding vendor-suggested improvements solely because they do not accord with current practices; otherwise a newer version of the current system may perpetuate existing weaknesses.
- Risks of over-specification: COTS products may present many configurable options leading to complicated and inefficient outcomes if over-specified.
- Prototyping is recommended: develop and expose prototypes to reference groups rather than designing from a “blank sheet.”
- Plan for at least one extra production release to address emergent requirements; this release would normally occur approximately 12 months after the first production release.

### Implementation Considerations
- Early decision: choose between “big-bang” approach or gradual deployment (by tax-type, office segment, geographic regions, functional module, etc.).
- Trade-offs to consider: risk profile, practicality (e.g., country infrastructure including internet coverage and electricity supply), staff or taxpayer impact, technical issues such as data migration/conversion/interface requirements, duration of the program, cost and capability availability.
- “Big-bang” approach:
  - Moves all users for all tax-types to the new system at the same time and decommissions the old system.
  - Advantage: data migration likely simpler; no need for interfaces between new and old systems.
  - Disadvantages: no way back if new system fails; requires very thorough testing; all users trained at once; settling-in inefficiencies affect whole administration; defects affect whole organization and all taxpayers.
  - Risk: higher than staged introduction, but may be simpler, quicker and less expensive.
- All these issues must be weighed up to decide on an implementation approach.

### Data Conversion / Migration
- Effort required from administration staff in the data conversion process should not be underestimated.
- As soon as new data structures are known, a specialized project focused on conversion should commence.
- Automated processes can be employed to transfer data from legacy systems, but some data holdings may be corrupt, meaningless or incorrect and require manual inspection and correction.
- Where administrations have no electronic records, manual data holdings may need entry into the system either by manual entry or by requiring taxpayers to re-register using the new facilities.
- Common practice in such cases: bring registration data to the new environment while keeping historical accounting data in its manual state.

### Security Issues
- Review of security arrangements required for physical security and unauthorized access when introducing a new core system.
- Areas to address:
  - Physical security protection (from access to the computer center through end-to-end lockdown, e.g., disabling USB ports on office computers).
  - Access management.
  - Information security.
  - Penetration prevention measures.
  - Audit logging.
  - Identity and authentication processes.
- Data security is key to the reputation of a tax administration; hacks or breaches of secrecy can easily damage reputation.
- Attention needed to security risks posed by internet access and staff wrongdoing from unrestricted access to data.
- Ensure appropriate security policies and inbuilt protections are in place, reviewed, and updated regularly.

### Product Testing
- A thorough testing regime must be in place.
- Vendor testing:
  - Assume testing of the “clean” installation (before any configuration/customization) will be executed by the vendor using their own test cases.
  - This testing should provide a baseline for environment needs and performance expectations.
- Configuration and integrated testing:
  - Due to the high level of functional integration in modern systems, develop test cases for higher-level testing that cover full-range end-to-end processes.
  - Automated execution of these cases should occur throughout configuration/implementation.
- User Acceptance Testing (UAT):
  - UAT process is critical; common issue: UAT staff may reject tests because they dislike aspects rather than verify conformance to design.
  - Mitigation: develop and document UAT test scenarios based on system design and establish test success factors as early as possible.

### Change Management
- Effective change management is essential to the success of a COTS implementation.
- The system change will heavily impact tax administration staff and potentially users of the wider tax system—taxpayers, tax professionals, etc.
- A comprehensive change management process is required.
- Early communication of the reason for change is essential to allow a rational presentation of the case for change.
- During introduction, emotions can run high and it is difficult to rationalize the case for change in retrospect.
- Features of such a change process are listed in Box 1.

### Features of Major Change Processes (Box 1)
- Leadership and Communication
  - Provide a very strong statement of direction accompanied by a persuasive argument for its need.
  - Use layered communication:
    - For management levels: informative and instructional.
    - For operative levels: aspirational statement.
  - Information must be clear, consistent, regular, and actively counter rumors.
  - Explanation about why change is necessary and why it is good for the administration and the audience is essential so staff understand why their world is being changed.
- Planning, Governance, and Certainty
  - Present a clear description of what is happening and when it is likely to impact the audience; tailor this to specific audiences (e.g., areas threatened by redundancy or role change such as assessment officers being changed into desk auditors).
  - Describe how the change is being managed to ensure an orderly process and build confidence in outcomes.
  - Staff need certainty about what will happen to them, including adequate information, training, and equipment for the new environment.
  - Settling-in period: staff must be given time to become proficient within new arrangements.
  - Be prepared: have capability to respond quickly to issues, especially application errors, because unfixed errors cause loss of user confidence.
- Value, Opportunity, and Managing Existing Staff
  - Reinforce that base knowledge staff have about taxpayers and the overall tax system will not be altered by structural changes; use this to reinforce staff value to the administration.
  - Make staff aware of additional opportunities the new arrangements present (e.g., better job satisfaction).
  - Closely manage existing IT staff: existing systems must be kept running; expertise with legacy systems is needed for data migration.
  - Recognize long-serving staff with deep expertise may feel disenfranchised and de-skilled; their systems knowledge and understanding of business operations are assets to be reinforced and used in the replacement process.
  - Retain continuing business and IT design capability in the administration; existing staff are often ideal for this role.
  - Middle managers may feel threatened as they often advanced based on knowledge of existing systems; they need to champion the change and be supported.
- Common Pitfalls (Box 2)
  - Insufficient commitment by the senior executive body.
  - Program inputs and outputs (i.e., products and services) are not “owned” on an ongoing basis by the client business units.
  - Roles and accountabilities are not well defined, agreed, and accepted.
  - Program scope, objectives, and goals are not properly defined and agreed.
  - Program scope is not controlled (scope creep).
  - Program schedule and cost are poorly estimated.
  - Planning and coordination of resources is inadequate.
  - Outcomes/benefits are not properly defined in measurable terms.
  - Communication and change management issues are not properly addressed.
  - Stakeholder management (internal and external) is overlooked or not properly addressed.
  - Maintain risk registers at both program and project levels to identify, assess, provide mitigation strategies and treat risks; registers should be actively used and updated regularly throughout the life of the program.
- Risk Assessment and Tolerance
  - Use a matrix combining likelihood and consequence to assess and rank risks (see Figure 3 structure of CONSEQUENCES 1–5 and LIKELIHOOD A–E).
  - Large, integrated programs are not tolerant of shocks; small delays or sudden loss of key personnel can cause chaotic effects.
  - Build risk tolerance measures into program structure: contingency plans, succession plans, schedule “slack”, etc. — effectively a business-continuity plan for the program.
  - Incorporate stage gates—review processes at critical stages presenting options: Continue as planned; continue with a modified plan; or stop the program.
  - Key decision questions when considering stopping a program:
    - Does the administration still need the outputs that were originally envisaged?
    - Have changes to business operations occurred during the program which need to be restored to previous states? E.g., widespread pilot operations, external interfaces, etc.
    - Can the old system be kept running until a new solution is found?
    - What will be the wider impact of cessation—political/funding, etc.?
    - What caused the problem and how can it be rectified before it recurs?
    - What are the next steps?
- Stage Gates and Roadmap Timing (Figure 4 elements)
  - Establish Program Governance — Month 1
  - Establish Funding Availability — Month 1
  - Approve ICT Strategy — Month 1
  - Solution Preparation — Month 6
  - Solution Procurement — Month 10
  - Solution Pilot — Month 15
  - Roll-Out Administration Wide — Month 20
  - Review Enterprise Information Systems Architecture — Month 25
- Effects on Business-as-Usual Systems Operation
  - A typical COTS systems replacement program will usually take a minimum of three years.
  - Given the need for a thorough procurement process, it would be extremely unlikely to be achieved in less than two years, even if there was an existing clear articulation of requirements and design.
  - Pressure on expert staff during the replacement period is often extreme; expert staff should be seconded from their full-time jobs to particular activities (usually design) and replaced for that period.
  - Secondment can provide opportunities for new staff to step up and for emergence of future executives.
  - Overall agency costs typically increase for the period of the redevelopment processes due to:
    - Replacement of seconded executives.
    - Increased hardware and multiple operating environments for build and testing.
    - Need for expert business staff to work on design and data conversion.
    - Need to resource the Project Management Office with in-house staff.
    - Increased need for fast agency-wide corporate decision-making.
  - Adequate provision needs to be made in forward plans to cater for operating budget pressure.
  - Keep “optional” IT work to a minimum during the replacement period; enforce strict prioritization.
  - Minimize work that will be redundant when the new system is implemented; reuse existing legacy functionality where possible or build new features so they can be re-used by the new system.
  - Consider approaching law-makers to explain program effects on required legal changes.

*Technical Notes and Manuals 17/03 | 2017*

### 1.   Delivers a successful program to the Minister.

### 1.   Delivers a successful program to the Minister.

### Governance and Key Roles
- Sponsor (Minister-level responsibilities implied by heading):
  - Delivers a successful program to the Minister.
  - Ensures the governance structure is appropriately staffed.
  - Chairs the business of the reform steering committee.
  - Solicits and obtains funding for the program.
- Independent assuror (a highly experienced professional engaged by the sponsor to provide direct advice on any program feature), particularly:
  - Vendor performance.
  - General progress at either program or project level.
  - Specific guidance on issues resolution.
- Steering committee (project sponsor, project owners, director/head of reform program office, external representatives):
  - Provides strategic direction to all project teams.
  - Ensures from the start that a project’s scope aligns with the program plan and requirements of the target stakeholder groups.
  - Assesses project feasibility in terms of resource commitments vis-à-vis the benefits or outcomes.
  - Allocates resources to projects and provides timely and objective decisions on prioritization of initiatives.
  - Monitors project scope and keep it under control as seemingly small emergent issues can force a departure from plan.
  - Deals with issues and risks that have implications for the projects.
  - Makes binding decisions on cross-cutting issues across projects in order to balance conflicting priorities against available resources.
  - Checks adherence of project activities to standards of best practice, both within the organization and in a wider context.
  - Takes necessary steps to secure policy decisions or legislative amendments needed to achieve program objectives.
- Central program management office (full time, director/head of reform program, project counterparts):
  - Kick-starts the implementation of approved projects.
  - Guides the preparation of the project plans.
  - Manages vendor contract(s).
  - Consolidates periodic project status reports for presentation to steering committee.
  - Provides secretarial services to the steering committees.
  - Monitors all aspects of the project components.
  - Oversees day-to-day project implementation and provides advice and technical project management support to the project teams.
  - Disseminates and applies good practices for effective project management.
  - Ensures corrective measures are taken whenever institutional plans are modified and when project milestones and deliverables are behind schedule or not meeting set standards.
  - Ensures that the set standards for project monitoring and evaluation are met, including arranging for quality assurance services based on need.
  - Coordinates the resolution of complex cross-cutting issues among projects.
- Project sponsor (often the head of the business area/sector):
  - Delivers a successful project to the Director General/CEO.
  - Prepares the project owner’s brief to the steering committee.
  - Provides the project’s strategic direction and overview.
  - Appoints an appropriate project manager.
  - Presents the project business case/justification to the steering committee.
  - Approves the project plan and any material change requests.
  - Monitors progress against the project’s objectives.
  - Ensures risk is effectively identified and managed.
  - Signs off completed project.
- Project manager (full time, appointed by the project owner):
  - Delivers a quality project on time and within budget to the project sponsor.
  - Establishes the project in the project administration system through a formal registration action.
  - Prepares a project justification or business case to be considered by the steering committee before approval.
  - Prepares, implements and updates the project plan.
  - Manages the project according to the project plan, including:
    - Leads the team proactively, providing guidance necessary to ensure the project meets the agreed objectives.
    - Encourages team members to take ownership and accountability for their identified responsibilities.
    - Promotes a team approach and provide timely feedback to team members.
    - Seeks (constructive) feedback throughout the project.
  - Communication—the project manager must:
    - Promote the project and its benefits at every opportunity.
    - Identify any resistance to proposed changes and sensitize affected staff and stakeholders in a timely manner.
    - Build and maintain key stakeholder relationships.
    - Share experiences with other Project Managers.
    - Communicate change management initiatives at every stage.
  - Vendor/supplier management—the project manager must:
    - Ensure vendor progress complies with the contractual obligations.
    - Assign a suitable contract manager to work with the vendor.
    - Ensure vendors comply with their quality plans.
    - Adequately check all key deliverables before acceptance.
    - Meet the vendor expectations in regard to timelines, counterpart support, and quality of revenue agency inputs.
- Project team (full time, appointed by project sponsor in consultation with project manager):
  - Work with the project manager and vendors to develop the detailed project plan.
  - Prepare the project work plan allocating time and resources to tasks.
  - Carry out the day-to-day project activities specified in the work plan.
  - Plan for implementation of project initiatives, including decisions on pilots, development of specification documents, etc.
  - Monitor and evaluate implementation of activities in the project plan.
  - Prepare/update and submit progress reports including issues and risk assessments to project manager.
  - Develop messages to be communicated to different categories of stakeholders.
- Business owner(s):
  - Responsible for managing the project outputs after the closure of the project and accountable to the project sponsor for the realization of the project outcomes/benefits in the post-project environment.
  - Continuously involved from the early conceptual stages of the project through to the testing and acceptance of the completed outputs.
  - Provide assurance that the project will deliver all of the outputs necessary to realize the expected outcomes/benefits.
  - Contribute subject-matter expert resources to the project in order to ensure that the outputs are developed satisfactorily.
  - Ensure that the project outputs (i.e., products and services) are “fit-for-purpose.”
  - Ensure that appropriate change management planning is in place to integrate the project outputs into the regular business operations when the project closes.
- Reference groups:
  - Convened as needed to address particular facets of the project; made up of a small representative group of clients/users from areas that will be affected by the project’s work.
  - Participants selected on the basis of experience and/or special expertise; convened to focus collective technical expertise and business experience to reach consensus solutions to operational issues.
  - Promote “ownership” of the project outcomes more broadly across the organization and within the community.
  - Help disseminate information about the scope and outcomes/benefits of the project throughout their business areas and peer groups.
- Consultants and contractors:
  - May be engaged to provide specialist expertise or services not available from internal resources. Typical examples include:
    - Business analysts;
    - IT specialists;
    - Legal advisors;
    - Probity advisors;
    - Training experts;
    - Communication experts; and
    - Quality assurors.

### Vendor Roles and Relationships
- Purchasing a COTS product creates a long-term arrangement with the vendor; care must be taken to manage the arrangement and resolve issues quickly and effectively.
- Vendor-supplied experts are essential to a successful outcome; project teams gain most if they act cooperatively and assimilate vendor representatives into the team.
- Vendor engagement types:
  - Long-term support plus installation/configuration: vendors may take leadership roles and provide staff for the majority of project roles, becoming integrated into the administration.
  - Shorter defined term (install/configure only): vendor acts in a consultant-type role—explaining and teaching administration staff to manage the product.
- Important to note vendor’s experience in previous installations/configurations as they can often explain how particular issues have been handled successfully elsewhere.

### Business Process Considerations
- Introduction of a new system provides options for business process re-engineering (BPR); COTS products can accommodate many different processes.
- Recommended engagement of BPR specialists and design disciplines such as Lean Six Sigma, Rapid Application Design, Agile methodologies to facilitate reference groups.
- User expectations must be carefully managed; COTS products often have some level of business process built in and represent outcomes of vendor research on general needs of tax administrations.
- Business owners and IT officials must be central to assessment, design and implementation activities.
- Avoid discarding vendor-suggested improvements solely because they do not accord with current practices; otherwise a newer version of the current system may perpetuate existing weaknesses.
- Risks of over-specification: COTS products may present many configurable options leading to complicated and inefficient outcomes if over-specified.
- Prototyping is recommended: develop and expose prototypes to reference groups rather than designing from a “blank sheet.”
- Plan for at least one extra production release to address emergent requirements; this release would normally occur approximately 12 months after the first production release.

### Implementation Considerations
- Early decision: choose between “big-bang” approach or gradual deployment (by tax-type, office segment, geographic regions, functional module, etc.).
- Trade-offs to consider: risk profile, practicality (e.g., country infrastructure including internet coverage and electricity supply), staff or taxpayer impact, technical issues such as data migration/conversion/interface requirements, duration of the program, cost and capability availability.
- “Big-bang” approach:
  - Moves all users for all tax-types to the new system at the same time and decommissions the old system.
  - Advantage: data migration likely simpler; no need for interfaces between new and old systems.
  - Disadvantages: no way back if new system fails; requires very thorough testing; all users trained at once; settling-in inefficiencies affect whole administration; defects affect whole organization and all taxpayers.
  - Risk: higher than staged introduction, but may be simpler, quicker and less expensive.
- All these issues must be weighed up to decide on an implementation approach.

### Data Conversion / Migration
- Effort required from administration staff in the data conversion process should not be underestimated.
- As soon as new data structures are known, a specialized project focused on conversion should commence.
- Automated processes can be employed to transfer data from legacy systems, but some data holdings may be corrupt, meaningless or incorrect and require manual inspection and correction.
- Where administrations have no electronic records, manual data holdings may need entry into the system either by manual entry or by requiring taxpayers to re-register using the new facilities.
- Common practice in such cases: bring registration data to the new environment while keeping historical accounting data in its manual state.

### Security Issues
- Review of security arrangements required for physical security and unauthorized access when introducing a new core system.
- Areas to address:
  - Physical security protection (from access to the computer center through end-to-end lockdown, e.g., disabling USB ports on office computers).
  - Access management.
  - Information security.
  - Penetration prevention measures.
  - Audit logging.
  - Identity and authentication processes.
- Data security is key to the reputation of a tax administration; hacks or breaches of secrecy can easily damage reputation.
- Attention needed to security risks posed by internet access and staff wrongdoing from unrestricted access to data.
- Ensure appropriate security policies and inbuilt protections are in place, reviewed, and updated regularly.

### Product Testing
- A thorough testing regime must be in place.
- Vendor testing:
  - Assume testing of the “clean” installation (before any configuration/customization) will be executed by the vendor using their own test cases.
  - This testing should provide a baseline for environment needs and performance expectations.
- Configuration and integrated testing:
  - Due to the high level of functional integration in modern systems, develop test cases for higher-level testing that cover full-range end-to-end processes.
  - Automated execution of these cases should occur throughout configuration/implementation.
- User Acceptance Testing (UAT):
  - UAT process is critical; common issue: UAT staff may reject tests because they dislike aspects rather than verify conformance to design.
  - Mitigation: develop and document UAT test scenarios based on system design and establish test success factors as early as possible.

### Change Management
- Effective change management is essential to the success of a COTS implementation.
- The system change will heavily impact tax administration staff and potentially users of the wider tax system—taxpayers, tax professionals, etc.
- A comprehensive change management process is required.
- Early communication of the reason for change is essential to allow a rational presentation of the case for change.
- During introduction, emotions can run high and it is difficult to rationalize the case for change in retrospect.
- Features of such a change process are listed in Box 1 (Box content provided in source).

*Technical Notes and Manuals 17/03 | 2017*

### Box 1. Features of Major Change Processes

### Box 1. Features of Major Change Processes

### Leadership and Communication
- Provide a very strong statement of direction accompanied by a persuasive argument for its need.
- Use layered communication:
  - For management levels: informative and instructional.
  - For operative levels: aspirational statement.
- Information must be clear, consistent, regular, and actively counter rumors.
- Explanation about why change is necessary and why it is good for the administration and the audience is essential so staff understand why their world is being changed.

### Planning, Governance, and Certainty
- Present a clear description of what is happening and when it is likely to impact the audience; tailor this to specific audiences (e.g., areas threatened by redundancy or role change such as assessment officers being changed into desk auditors).
- Describe how the change is being managed to ensure an orderly process and build confidence in outcomes.
- Staff need certainty about what will happen to them, including adequate information, training, and equipment for the new environment.
- Settling-in period: staff must be given time to become proficient within new arrangements.
- Be prepared: have capability to respond quickly to issues, especially application errors, because unfixed errors cause loss of user confidence.

### Value, Opportunity, and Managing Existing Staff
- Reinforce that base knowledge staff have about taxpayers and the overall tax system will not be altered by structural changes; use this to reinforce staff value to the administration.
- Make staff aware of additional opportunities the new arrangements present (e.g., better job satisfaction).
- Closely manage existing IT staff: existing systems must be kept running; expertise with legacy systems is needed for data migration.
- Recognize long-serving staff with deep expertise may feel disenfranchised and de-skilled; their systems knowledge and understanding of business operations are assets to be reinforced and used in the replacement process.
- Retain continuing business and IT design capability in the administration; existing staff are often ideal for this role.
- Middle managers may feel threatened as they often advanced based on knowledge of existing systems; they need to champion the change and be supported.

### Common Pitfalls (Box 2)
- Insufficient commitment by the senior executive body.
- Program inputs and outputs (i.e., products and services) are not “owned” on an ongoing basis by the client business units.
- Roles and accountabilities are not well defined, agreed, and accepted.
- Program scope, objectives, and goals are not properly defined and agreed.
- Program scope is not controlled (scope creep).
- Program schedule and cost are poorly estimated.
- Planning and coordination of resources is inadequate.
- Outcomes/benefits are not properly defined in measurable terms.
- Communication and change management issues are not properly addressed.
- Stakeholder management (internal and external) is overlooked or not properly addressed.
- Maintain risk registers at both program and project levels to identify, assess, provide mitigation strategies and treat risks; registers should be actively used and updated regularly throughout the life of the program.

### Risk Assessment and Tolerance
- Use a matrix combining likelihood and consequence to assess and rank risks (see Figure 3 structure of CONSEQUENCES 1–5 and LIKELIHOOD A–E).
- Large, integrated programs are not tolerant of shocks; small delays or sudden loss of key personnel can cause chaotic effects.
- Build risk tolerance measures into program structure: contingency plans, succession plans, schedule “slack”, etc. — effectively a business-continuity plan for the program.
- Incorporate stage gates—review processes at critical stages presenting options: Continue as planned; continue with a modified plan; or stop the program.
- Key decision questions when considering stopping a program:
  - Does the administration still need the outputs that were originally envisaged?
  - Have changes to business operations occurred during the program which need to be restored to previous states? E.g., widespread pilot operations, external interfaces, etc.
  - Can the old system be kept running until a new solution is found?
  - What will be the wider impact of cessation—political/funding, etc.?
  - What caused the problem and how can it be rectified before it recurs?
  - What are the next steps?

### Stage Gates and Roadmap Timing (Figure 4 elements)
- Establish Program Governance — Month 1
- Establish Funding Availability — Month 1
- Approve ICT Strategy — Month 1
- Solution Preparation — Month 6
- Solution Procurement — Month 10
- Solution Pilot — Month 15
- Roll-Out Administration Wide — Month 20
- Review Enterprise Information Systems Architecture — Month 25

### Effects on Business-as-Usual Systems Operation
- A typical COTS systems replacement program will usually take a minimum of three years.
- Given the need for a thorough procurement process, it would be extremely unlikely to be achieved in less than two years, even if there was an existing clear articulation of requirements and design.
- Pressure on expert staff during the replacement period is often extreme; expert staff should be seconded from their full-time jobs to particular activities (usually design) and replaced for that period.
- Secondment can provide opportunities for new staff to step up and for emergence of future executives.
- Overall agency costs typically increase for the period of the redevelopment processes due to:
  - Replacement of seconded executives.
  - Increased hardware and multiple operating environments for build and testing.
  - Need for expert business staff to work on design and data conversion.
  - Need to resource the Project Management Office with in-house staff.
  - Increased need for fast agency-wide corporate decision-making.
- Adequate provision needs to be made in forward plans to cater for operating budget pressure.
- Keep “optional” IT work to a minimum during the replacement period; enforce strict prioritization.
- Minimize work that will be redundant when the new system is implemented; reuse existing legacy functionality where possible or build new features so they can be re-used by the new system.
- Consider approaching law-makers to explain program effects on required legal changes.

*Technical Notes and Manuals 17/03 | 2017*

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_Source: https://www.imf.org/-/media/files/publications/tnm/2017/tnm1703.pdf_